GRAPHICS PRO

June '21

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G R A P H I C S - P R O. C O M 2 0 2 1 J U N E G R A P H I C S P R O 6 7 knowledge and provided all the informa- tion we needed to perform the job up to our standards. As we could not contact the end customer, we often found we had to invest extra communication time with these projects. SELLING YOUR SUPPLIER-PURCHASED PRODUCT How much to mark up the products that you purchase from your suppliers is a de- bated point in our business. Typically, it's a X times markup, and the higher the wholesale purchase price you pay, the lower the percentage of markup. For very low-cost products, the markup may be six times or higher. Some shops only markup two times. In determining your markup policy, consider these costs. Your research and or- dering time may be extensive. If the de- sired product is among your inventoried products or one you sell often, research and ordering may be routine. We offered a level of customer service that could in- clude a substantial amount of product research and special orders. Our mark- ups were higher on these special orders. Rush orders that interrupt your produc- tion schedule or require special orders and shipping time should also receive a higher markup. Shipping costs also must be considered. Your shipping costs can be substantial. I have seen shipping charges larger than the total product purchase price. If you are marking up two times, shipping costs will account for much of your markup. Consider what shipping costs add to an order. You may find on average shipping adds 1/2 or 3/4 times the cost of each product. So if you are considering a two or three times markup, you would have to markup 2 1/2 or 2 3/4 (or 3 1/2 to 3 3/4) times to obtain your target markup. YOUR DESIGNED AND PRODUCED PRODUCT Some of you design and create your own products to sell. It is important to consid- er your creative time pondering product ideas and especially your design time. Design time can be substantial. Also con- sider the product uniqueness in determin- ing pricing. You may offer custom-designed prod- ucts for customers that will not provide repeat orders for the same design. This can be especially challenging as the de- sign time can only be spread over one or a few produced products. If the design is a product that you believe has a larger audi- ence, discuss this with your customer. You may want to forgo the design fee for the right to sell the product without creating a problem with your customer. We used three different pricing meth- ods in our shop: per square inch for per- sonalization; X times markup of product for resale; and by the hour (or minute in 5-minute increments) for graphics, cus- tom production of product, design time, and table time (assembly, unpackaging and repackaging, etc.). My goal in this article was not to pro- vide a specific formula or a single approach to pricing. I wanted to highlight the many details and complexities to consider when planning a pricing approach. It is impor- tant to be thorough upfront as your pric- es will impact your business success for many years to come. GP BOB HAGEL recently retired after owning Eagle's Mark Awards & Signs for 18 years in Southern California. While owning the business, he offered a full line of personalized products using laser engraving, sandcarv- ing, and full-color UV direct print on products. Today, he consults on starting and expanding personalized businesses, and on improving production efficiency and quality. He can be reached at rjhagel@verizon.net.

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